Canned water has emerged as an alternative to plastic on retail shelves amid consumer concerns over the environment.
Water in cans is not brand new. The US government manufactured canned water for use as emergency drinking water during the Second World War.
However, what is new is the development of a market segment to rival the dominant packaging format – plastic – in the waters category.
“Canned water is considered a sustainable packaging option in the consumer goods industry,” GlobalData consumer analyst Magda Dziuba tells Just Drinks.
“Metal packaging, such as aluminium cans, is widely recognised for its sustainability credentials. Aluminium cans have a high recycling rate, with more than 70% of steel and aluminium cans being recycled. Aluminium is infinitely recyclable, meaning it can be recycled repeatedly without degradation. The switch to canned water is seen as a way for brands to demonstrate their commitment to the environment and sustainability.”
According to data issued by the United Nations University Institute for Water Environment and Health last year, the average European consumer drinks around 118 litres of bottled water per year, of which 97% is in plastic packaging.
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By GlobalDataA report by Brussels-based NGO Zero Waste Europe from 2022 suggests the recycling rate for PET plastic beverage bottles is estimated to be only 55% in Europe. Moreover, the same report put the chance of a plastic bottle being reconstituted into a bottle again following the recycling process at roughly 30%.
Investment flows into canned water
The packaged water market, dominated by products sold in plastic bottles, is facing the creep of regulation.
In 2022, the sale of single-use plastic bottles was banned in around 20 national parks in the US. New York City stopped sales in public buildings in 2020.
Campaigners have called for more action. In the UK last June, a tax on multi-packs sold in shrink packaging and restrictions on bottled water adverts were two solutions proposed by campaigners to stem the tide of plastic pollution in the UK.
Against this backdrop of consumer interest in sustainable consumption and regulatory action, canned water has attracted investment.
In 2022, UK canned-water producer Dash raised £8.7m ($10.9m) in Series A funding. The round was led by Beringea, a transatlantic investor firm that had previously backed UK non-alcohol beer brand Lucky Saint.
When we first started, people thought we were crazy.
Josh White, Cano Water
Last year, UK-based Cano Water, a business set up in 2015, received a “multi-seven-figure” investment via a funding round that included the backing of British comedian Ricky Gervais.
“In the past eight years, we have seen an incredible shift. When first starting Cano Water, people thought we were crazy as they had never seen water in a can before,” Josh White, a co-founder of Cano Water, tells Just Drinks.
“As time has gone on, with more press around plastic being bad for the planet and for our health, people have started doing their own research into better alternatives and have landed at the same conclusion as us all those years ago – that cans are a much better alternative to plastic when it comes to recyclability.”
The market has expanded past still or sparkling water. Flavoured canned water has become a common sight in stores.
Nic Yates, the marketing director of UK-based Highland Spring Group, says the UK-based group launched flavoured sparkling water in cans three years ago.
“Our research identified that consumers were looking for a fuller-flavoured low-calorie drink that contained no artificial sweeteners. The market pre-2021 was not meeting consumer needs; with taste and lack of flavour being the biggest issues, driving low repeat purchase,” he says.
“Flavoured canned waters over-index with women and those between ages of 25 to 44. However, the products appeal to a wide range of consumers and have multi-occasional usages. They are perfect for sharing with friends, as a soft drink, as an alcohol replacement, and are great as a mixer.”
Sustainability goals driving brand numbers
Some canned water brands put environmental sustainability at the centre of their corporate identities. ESG can even be the main reason the company was established.
Jess Page and Nicole Doucet founded US canned water brand Open Water when they left college. They had seen that even though reusable water bottles were for sale, the single-use plastic bottle water market kept growing.
Open Water launched its first still canned water product in 2014, following that up with a sparkling variant in 2016.
“I think when we first launched back in 2014. I would say we were almost too early. The consumer really wasn’t educated about us as a company and didn’t really understand the value proposition and so the first few years it was a lot of education,” Doucet tells Just Drinks.
“We’ve been growing pretty much 100% for the past four years. There’s been very, very strong growth.”
The need to first educate and then entice consumers to canned water products appears to be a common issue and an initial market requirement for many brands, although, with more brands entering the market, this need is waning.
Liquid Death founder and CEO Mike Cessario says: “Putting still mountain water in cans was strange for some people at first because we’ve all been conditioned to drink water from plastic bottles.
“But for other beverages like beer, no one prefers to drink beer from a plastic bottle. So once people tried it and understood our ‘death to plastic’ mission with aluminium being infinitely recyclable, people really connected with the brand.
“For Liquid Death as a brand, we have a surprisingly wider audience than some may assume. But generally, our core audience leans slightly more male than female and about 70% is Gen Z and Millennials.”
One company is taking environment protection to the level where not only are they trying to reduce new plastic production but are actively removing existing plastic waste.
Actor and ocean conservationist Jason Momoa founded the California-based canned water brand Mananalu in 2019.
Mananalu pays the campaign group RePurpose Global an undisclosed percentage for each can it sells and the New York-based NGO undertakes waste-picking services in places like Indonesia and Colombia, taking plastic out of waterways and fields.
It is clear we are addressing a consumer desire to make bottled water more sustainable.
Margaret Mannion, Mananalu
“In partnership with rePurpose Global, we remove one water bottle’s worth of plastic from ocean-bound waste for every bottle of Mananalu that’s purchased. So far, we have saved the equivalent of 15 million plastic bottles from entering the ocean,” Margaret Mannion, director of marketing at Mananalu, tells Just Drinks.
“We’ve seen close to 12% growth in the sustainable packaged water category for non-carbonated water since 2021. It is clear that we are addressing a consumer desire to make bottled water more sustainable.”
It should be noted recyclable aluminium cans are not completely plastic-free.
In order to protect the can from being corroded by acidic contents, an epoxy lacquer or polymer is sprayed on the inside. It stops the metal from reacting with the beverage, tainting the can and possibly imbuing the drink with a metallic flavour.
The demand for aluminium
The cost of aluminium has caused headaches for beverage companies in recent years, with prices spiking due to supply chain disruption, tariffs and energy input costs.
Yet demand increases. The Aluminum Association reported that North American demand for the metal rose by 4.8% year on year in 2022, to roughly 27.5bn pounds of aluminium.
“After a year of constant price rises, mainly affected by energy costs, we have started to see some stability,” William Watkins, founder and MD of Radnor Hills, says.
“Equipment remains expensive, packaging has plateaued and energy has subsided. Over this period, labour costs have increased significantly but, all things considered, I expect prices to remain stable.”
The recyclable nature of aluminium is not only what makes it a sustainable option but can also drive down input costs.
“Recycling aluminium is far more energy-efficient than producing new aluminium from bauxite ore,” Mannion says. “It consumes 95% less energy, leading to a significant reduction in greenhouse gas (GHG) emissions.
“While it’s true that the initial production of aluminium is energy-intensive, the energy savings and GHG reduction during the recycling process can more than compensate for this, particularly as recycling rates soar.”
Canned water producers such as Open Water and Liquid Death claim that their products contain approximately 70% recycled aluminium.
The future of the category
The canned water market has jumped from a few nascent brands in the early 2000s to a plethora of competing – often environmentally-focused – single-use plastic alternative providers.
Larger organisations such as PepsiCo and The Coca-Cola Co. are also players with Aquafina Water and Dasani, respectively.
“We knew more brands would eventually start putting water in cans – but a can alone can’t be your brand,” Liquid Death’s Cessario says. “Imagine a beer brand marketing itself as ‘Beer in a can!’ Once there’s lots of brands all in cans, like any other category, the strongest brands will win.”
Watkins, Radnor Hill’s founder, notes the CO2 retention qualities of cans are quite high, which gives them an advantage over bottles. He envisions a sparkling water market may move a “significant percentage” of its product to cans.
I don’t see still canned water taking a huge share of the water market.
William Watkins, Radnor Hills
However, Watkins has a note of caution, not least around the convenience of plastic bottles versus the current canned formats.
He adds: “I don’t see still canned water taking a huge market share of the water market. It is a much more expensive packaging format, and there are challenges around resealability.”
The growing consumer scrutiny of drinks brands and their impact on the environment is unlikely to dissipate. The threat of further regulation remains. Bottled-water brands will have to invest in either making their current plastic formats more sustainable or in the development of alternatives – and perhaps both.
“I think most retailers are saying ‘Okay, this product isn’t going away, what can we do? What is our role within this ecosystem? What can we do to kind of transition into a better solution out there?’” Open Water’s Doucet says. “A lot of retailers are instead saying ‘Okay, we want the bottled water category to be plastic free.”
Given that cartons contain more plastic than cans and glass’s input and transportation costs are high, aluminium canned formats could offer the most effective alternative.
